All Forum Posts by: Andrew Postell

@Jesse Kailahi What @Russell Brazil stated is 100% correct.  I have many customers who do mulitple deals per year.  Buying a car has more impact on your credit than buying a home.  Make as many offers as you like!

@Bob Freitag what you are describing is a common element to investment homes. The "Conventional" loans (Fannie Mae and Freddie Mac, if you recognize those names) have a rule of 75% Loan Limit on the home in comparison to how much it's worth - other wise know as "Loan-to-Value". That means that banks are not allowed to go higher than 75% on a conventional loan (with some rare exceptions that might apply to you but more on that in a second). The banks are allowed to be more strict on it if they want to though. So if a bank only wanted to lend 65% then they could. So it's important to find a bank that doesn't have any "overlays" (that's what my industry calls the extra rules banks put on top of Fannie or Freddie rules). So 75% should be what you should expect in refinancing an investment property. On a side note, purchasing an investment property you only need 85% LTV or 15% down if needed. They are a little less strict when purchasing the home but once you own it 75% will be the hard ceiling on a Single Family Home (it's lower on duplexes, triplexes, etc.) Now, on to the exception I hinted at earlier and I think this will apply to you - There is one scenario where a bank will allow more than 75% of the purchase price - and that's if you bought the home with cash! It's called a "Delayed Financing" loan. You can get 100% of your purchase price back with a Delayed Financing loan. Again, every bank does not offer this. What Delayed Financing is best described as is a loan where you can recoup 75% of the ARV or the purchase price of the home, whichever is the lower figure - AND the transaction has to be done within the first 6 months of you owning it *WHEW* I know that's a lot but here's the math: Let's say you bought the home for $50k and put $50k into the home. The home appraises for $100k. Remember the rule? 75% LTV or Purchase Price,which ever is lower - so you can get 100% of your purchase price back because it's less than 75% ARV. I hope that makes sense. Different math is you bought the home for $50k, put $10k into it and it's worth $65k. you are limited to receiving back 75% of the ARV since 75% would be $48,750.

@Lucas Hammer I'm glad I caught your post. The answer to your question is yes, you can find another loan that allows renovation work to a home.  Portfolio loans and Hard Money lenders have a loan that allows renovations but so does Conventional Loans - it's called a "Homestyle" loan.  Some things you should know about it:  Any loan type that lends you money with the basis of repairs will not allow you to do the work yourself...unless you are a licensed and insured contractor with work references type of thing.  The bank's position on this is to protect their customer and their own interest.  So any renovation type of loan will require approved contractors and they will be paid a small amount up front with inspections along the way to make sure the work is being performed up to code, etc.  Once the work is completed and signed off on then they get the rest of their money. This is to protect  everyone from a contractor skipping town with a bunch of money (it's happened). These renovation type loans are specifically designed for distressed properties or properties that you want to add square footage to or something along those lines.  If you found a property and it's "move in ready" and you just want to update it over time that is something different and you can do that work yourself.  Rolling in the costs of the renovation work into your initial loan is permitted as well but with some checks and balances in place.  If the home you are looking to renovate will be your primary home you can purchase it with the Homestyle loan with 5% down.  If you are buying the home as an investment property then as little as 15% down for the Homestyle loan.  Hope this helps!

@Jacob Pischer I think I may have received a letter like this before.  It was a while back but after trying to reach the person several times I stopped since I never heard anything back from them.  I would recommend that networking is the best method to reaching the right lenders.  Remember there are 15,000 banks in the US (that's no exaggeration) and not all of them are good at investing loans.  It is hard to find lenders out there but generally mailing people doesn't work out.  It's kind of like mailing shoe stores to find a shoe...it might get you some information but you still have to go try on the shoe.  Even if your letter is received your still going to have to interview them on the phone.  Just use the phone to call and save yourself a step.  If you need help actually finding banks then create a post here with the subject of "looking for lenders in X"  You'll get responses.  I might even suggest to search for realtor investor groups in your area to meet other investors who have worked with banks that are friendly to investors.

@Adam Avinger in theory if you minimally cash flow on a home you still come out ahead because of the tax breaks it provides at the end of the year. We don't buy homes for the tax break, we do it for the cash, but it's a small concession to think about. If you make out better selling in 2 or 3 years then I would favor keeping the property for now. If the goal is to do more flips selling this home at a break even won't help you accomplish that. And to help with the credit item; as a lender who lends to investors holding the property will NOT affect your DTI. If a lender penalizes you for this then go and find another lender because this is not what we as investors need. An investor friendly lender will take into account that you rent the property and that will offset the new mortgage payment. In theory, you should be in a better position for the next property. But to address specifically your credit score - ANY new item will decrease your score for a few months. Credit Cards, Cars, etc. It raises back up once they see you can make the payments for a newly opened item. Generally it dips for a couple of months then becomes higher than it was previously. There are a lot of factors to credit but that's the general way it works. Hope this helps!

@Melissa Fleury your story sounds extremely familiar.  I moved here from NYC 4 years ago.  Winters here are just a little easier.  The housing market is amazing.  If there is anything I can do to help as a lender please let me know.  I specialize in Texas and investment properties.  Welcome to the Big D!

@Jennifer Cornforth there is absolutely no issue based on what you described.  I have many customers that do several applications in a year and have no issue with receiving new loans.  It is normal for a bank to ask about companies that have checked your credit in the past 3-6 months.  There is usually a standard form for this and your explanation can be:  "Shopped for Home. Mortgage history on credit report".  And that's all you need to satisfy their "inquiry explanation".  Hope this helps!

@Jacob Pischer what is the purpose of your mailing?  What are you hoping to accomplish?

@Kris Wong welcome to Bigger Pockets!  Nice to see so many fellow Texans here!

@Account Closed my firm recommendation is to research everything you can. Google it all and be an expert. My second recommendation is to speak with a Loan Officer who you feel comfortable with. There are a lot of us out there and some are better than others so you may have to interview a few. Remember you are about to enter a 30 year relationship with them...that's longer than most marriages. And you are probably making the largest financial decision of your life. Make sure you have a good person in your corner. A helpful loan officer will help you understand how much money you need for a down payment, how much typical closing costs will be, how an FHA is different than other loans, and how they can benefit you. A good loan officer will also answer emails and their phone. Hopefully this helps!